Archive for the ‘policy’ tag

Ok, so in reading all the doom and gloom about what Alberta is and is not doing about climate policy, a ray of sunshine emerged today. Andrew Leach from the U of A fired a number of quotable zingers in an Edmonton Sun article (see here) that bare repeating:

“A big part of the problem with climate change is that we’ve been sold a free lunch,”

“We’ve constantly been told that reducing energy consumption is both good for the environment and will save us money. What we’ve never been told by government is that if we want to take this seriously, it’s going to cost us.”

And referring to the reliance on CCS for all reductions,

“What worries me most about this plan is that they’re betting on one horse,”

While these got me chuckling, more importantly they are spot on. And they were published in the Edmonton Sun, which continues to provide a nice window on that segment of Canadian society that thinks climate action is a crock.

But perhaps of more relevance to the state of climate policy in Canada, Andrew sent along these quotes from, I think, an American Economic Review article by Schelling, 1984:

The most a government can commit to is an input, not an output – a program, not a result. A government can attempt to commit itself on the variables it controls, but the promised results are only as credible as the commitment and the theory that generates the results.

This is a weakness of any effort to control inflation (or emissions) through expectations. It is hard enough for a government to commit itself reliably over a protracted period to what may be painful and unpopular; translating even a confidently shared expectation of government action into a shared expectation of results requires that a decisive subset of economic agents confidently share a theory, identical to the government’s theory, of how program inputs relate to inflationary (or emissions reductions) outputs. Without the shared theory, only the inputs can be credible.

Who says economics is dismal? And oh yes expectations matter if you want folks to reduce emissions.